It's normal to look at the state of the stock market in 2022 and wonder how your portfolio should change. Major indexes are still underwater after three months of trading, there is uncertainty around Federal Reserve interest rate policy, and the war in Ukraine is roiling commodity and energy markets worldwide. But as Sir John Templeton famously wrote in his 16 rules for investment success, "The investor who says, 'This time is different,' when in fact it's virtually a repeat of an earlier situation, has uttered among the four most costly words in the annals of investing." Yes, there's uncertainty in this moment – but don't panic! In the long run, the stock market has always found a way to thrive. If you want to move past the day-to-day uncertainty and instead focus on building long-term wealth, then consider these nine dividend stocks to buy and hold forever. AbbVie Inc. (ABBV) Consolidated Edison Inc. (ED) Boston Properties Inc. (BXP) Johnson & Johnson (JNJ) Morgan Stanley (MS) Prudential Financial Inc. (PRU) Public Storage (PSA) Procter & Gamble Co. (PG) Verizon Communications Inc. (VZ)
I would swap out BXP for DIS. Although I'm not nuts about Disney's woke politics right now, I can put my politics aside and think it will be around for a long time. I have owned Disney since they day I was born, DRIP investing the entire time. BXP basically back to where it was before the pandemic essentially pricing in a full recovery of return to work that I'm not convinced will happen. At least not like it was before. Would also swap out PG for WMT and maybe ED for UNH or a senior care REIT.
Why this list of dividen stocks? Is it because they offer dividends? What of their growth without dividend? What's their dividend annual returns? A friend bought VZ "because the dividends will pay for my property taxes, so I can check that box". I thought, how strange for someone who owns TSLA shares, even if it only returned 50% in 2021.
AbbVie is probably the only company on the list that can be called a growth company the rest are stodgy companies. AT&T looked like a safe dividend company too, until it imploded from all the debt and terrible management. GE also was a safe dividend company until it imploded as well. The safest is to buy the Dividend Aristocrats ETF (NOBL). It only has a yield of 1.9% so it is basically a value fund. It is down 2.5% vs. 6% for the S&P 500. My personal experience says buying stocks because of dividends is not good. I've owned pipeline MLPs & as well as mREITs that have astronomical dividends but they were never sustainable. Before the oil price crash of 2012-2016 I owned an ETF of MLPs and even it was down like 70-80% by 2016. Even Kinder Morgan which was considered the best was down about that much. I used to also own mREITs like NLY, AGNC, etc. and these are just leveraged bond plays in the end. Their business model is borrowing money to lever up on CMBS & CMOs. So as long the real estate environment is stable they will do okay and so your 10-15% dividend is safe but when the Fed starts to raise rates or the credit spreads start to widen the equities of these companies will collapse as they did in 2008 & 2020. The mREITs are already starting to crash. Annaly peaked in June 2021 and is down 30% from the highs. So the 10% dividend was useless.
ABBV was insane for daytrading options. Market did not price it for big moves in a single day so the slightly OTM 170 call went up like 500%+ Trading at a 4-5 point range in the last 3 days but obviously this momentum won't last forever.